It was an issue that threatened the bottom lines of Florida's safety net hospitals, which are now breathing a collective sigh of relief.

The federal government had accused them of erroneously receiving $267 million in Medicaid payments over the past eight years and wanted it back immediately. Hospitals asked for a compromise to soften the blow by spreading the penalty over three years, giving them time to finalize audits and possibly dispute the charges.

The hospitals got even better news Thursday. In a letter granting a three-year renewal of the state's Medicaid managed care program, the U.S. Department of Health and Human Services said it will slow down on the repayment issue and focus only on part of the disputed funds.

For now, the federal government will only go after hospitals for $104 million that audits show was overpaid through the Low Income Pool fund for the first three years of the program. Hospitals will also be allowed to file appeals and challenge the amounts before any money is recouped.

The remaining $163 million is off the table for now, although HHS said it will continue to review LIP payments for the five years of the program that have already passed to determine if additional money has been overpaid.

The difference for individual hospitals is significant. Tampa General Hospital faces a maximum penalty of $5.2 million, instead of $13.3 million. The stakes were even higher at Jackson Memorial Hospital in Miami, which initially faced a $47 million loss that has been lowered to $18.3 million.